By Steve Gelsi
A new academic study warns the cost of building nuclear power
plants will likely come in at the high end of current industry
estimates of $5 billion to $8 billion each. It also warned it would
be cheaper for the U.S. to instead focus on energy efficiency and
alternative sources such as wind and solar.
The study by the Vermont Law School's Institute for Energy and
the Environment comes as the nuclear power industry moves forward
with plans to build at least two dozen new reactors backed by
federal loan guarantees and other subsidies, including one project
officially launched on Thursday in Ohio by Duke Energy (DUK).
The projected costs for nuclear plans amounts to 12 cents to 20
cents per kilowatt hour, more expensive than the average cost of
increased use of energy efficiency and renewable energies at 6
cents per kilowatt hour, according to the study.
"There are a host of alternatives that are superior to nuclear
reactors," said Mark Cooper, one of the study's authors. "Building
nuclear reactors would be the worst choice you could have for
reducing carbon emissions."
Cooper sifted through 36 cost estimates for proposed new
reactors and concluded that the projected price tags have already
quadrupled since the start of the industry's so-called "nuclear
renaissance" nearly a decade ago.
The costs have risen even before any approvals for new plants by
the Nuclear Regulatory Commission, a process expected to take
another two years or so.
In a conference call with reporters, Cooper pointed out that the
last surge of plant construction in the U.S. from the early 1960s
and 1970s saw a sevenfold increase in plant costs. Half of planned
reactors had to be abandoned or cancelled due to massive cost
overruns, he said.
A new set of loan guarantees and other subsidies will help shift
the risk and potential costs of the new generation of plants onto
rate payers and taxpayers, he said.
"The nuclear industry is hiding costs and risks are shifting to
the taxpayer," said Peter Bradford, a former member of the U.S.
Nuclear Regulatory Commission. "The subsidies don't show up in cost
estimates to rate payers."
Steve Kerekes of the Nuclear Energy Institute, an industry
group, argued that comparisons to nuclear power plant costs 30
years ago are moot because the underlying economic conditions have
changed.
"Back then you had much higher inflation," he said. "Newer
reactors have more interchangeable parts with modular designs.
They've been built in less than five years in Europe already."
Kerekes also pointed out that the cost of alternative energy has
risen as well, and noted that a wind farm proposed by Boone Pickens
will likely cost $10 billion to $12 billion according to press
reports.
While the wind farm could generate the equivalent power of one
nuclear reactor, it's already expected to cost more than the $5
billion to $8 billion projected cost of a new reactors.
Meanwhile, Ohio Governor Ted Strickland, Duke Energy, Areva,
USEC Inc. (USU) and UniStar Nuclear Energy formed an alliance to
build a nuclear power plant at a U.S. Department of Energy site in
Piketon, Ohio.
Dubbed the Southern Ohio Clean Energy Park Alliance, the
partnership will evaluate the site as a potential location for a
new nuclear power plant, including preparing a plant site study and
licensing documents for the Nuclear Regulatory Commission.
UniStar is a joint alliance between France's EDF and
Constellation Energy (CEG).
The clean energy park comes after an Energy Department effort to
convert former weapons sites for energy production. Duke will
manage the project, provide project oversight and serve as the
applicant for any NRC licensing.
Of the 27 new reactors now proposed for the United States, the
Duke-UniStar project marks the third to be proposed at a site that
doesn't include an existing plant, according to Mitchell Singer of
the Nuclear Energy Institute.
The other two are the Duke Energy project in Cherokee County,
S.C. and a Progress Energy (PGN) plant on the books for Levy
County, Fla.
-Steve Gelsi; 415-439-6400; AskNewswires@dowjones.com